Revenue
Sacra estimates that Icertis hit $225M in annual recurring revenue (ARR) at the
end of 2022, up 41% from $160M at the end of 2021.
Business Model
Icertis is a subscription software-as-a-service (SaaS) company that sells access
to its cloud-based contract lifecycle management (CLM) software via yearly
enterprise contracts, charging based on the number of seats a company needs
and the number of different products they use.
Factors like the number of contracts being managed, the degree of integration
required with other systems, and the extent of usage across different
departments within the organization may all further influence the price of
implementation.
Icertis primarily employs two sales motions: direct sales to larger organizations
through its dedicated sales team, and channel partnerships with global
consulting and tech firms. These partnerships extend the company's reach and
bolster its ability to provide comprehensive contract management solutions.
For example, buying Icertis Contract Intelligence via SAP Ariba will run
companies $200K for the year and give them seats for 100 users.
Supporting these enterprise deployments are teams of sales engineers and
account managers who assist with implementation, training, and ongoing
support. A portion of Icertis's revenue is likely derived from these professional
services, comparable to other SaaS companies in similar sectors.
Icertis customers today include Daimler, Airbus, Johnson & Johnson, Google and
Microsoft.
Product
Before end-to-end digitized contract lifecycle management (CLM) software such
as Icertis's, contract management was primarily a manual or semi-automated
process.
Contracts were typically managed using paper-based systems or basic digital
tools, and they were often viewed merely as static legal documents rather than
strategic business assets.
This traditional method was time-consuming, inefficient, and susceptible to
errors and oversights, which could result in significant financial or legal risks.
Icertis's CLM software automates numerous stages of the contract lifecycle,
reducing manual intervention, improving speed, and minimizing errors. This
automation extends from contract creation, negotiation, execution, to
management and compliance checks, streamlining the whole process.
Icertis's software can then connect the extracted contract data to procurement,
enterprise resource planning (ERP), and human capital management apps. This
integration offers a holistic view of the business operations and facilitates
strategic decision-making.
Competition
The contract lifecycle management (CLM) market is highly competitive, with
several SaaS companies vying for market share, including Adobe, DocuSign,
Conga, Agiloft, Oracle, PandaDoc, and Ironclad.
For each of these platforms, offering a wide range of integrations to 3rd-party
SaaS tools is key, because of how workflows in CLM touch on so many ancillary
products. Ironically, the extent to which these tools have indexed on
interoperability has now made it easier than ever for their customers to switch
away from one tool to another.
DocuSign
Icertis's primary competition, DocuSign, has significantly invested in the CLM
market through acquisitions like Chicago-based SpringCM ($220M) and Seal
Software ($188M), whose AI capabilities for automating and analyzing legal
contracts are now part of DocuSign Agreement Cloud.
Icertis
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Icertis is a provider of cloud-based contract lifecycle management software.
#b2b #productivity
REVENUE
$225,000,000
2022
VALUATION
$2,850,000,000
2022
GROWTH RATE (Y/Y)
41%
2022
FUNDING
$280,860,000
2022
Details
HEADQUARTERS
Bellevue, WA
CEO
Samir Bodas
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Published on Jun 08th, 2023
Despite facing challenges with customer retention, DocuSign has seen growth in
the number of high-spending customers and its international revenue. As of their
Q1’23 earnings call, customers with annual spend above $300K grew 32% year-
over-year to a total of 886. Dollar net retention for the quarter sat at 114%.
International revenue grew faster than domestic—43% year-over-year to $144M.
Adobe
Similarly, Adobe has its own CLM solution that is a part of Adobe Document
Cloud. Adobe Document Cloud and DocuSign are closely matched in terms of
annual revenue, but Adobe's CLM services only account for a fraction of its total
revenues.
Adobe Document Cloud revenue for 2022 was about $2.38B—about 13% of
Adobe’s total revenues of $17.6B.
TAM Expansion
The size of the addressable market for contract lifecycle management
companies was estimated at $20B in 2021, and growing 30% year-over-year.
The growth of Icertis's underlying CLM software market is being driven by the
broader digital transformation trend (as accelerated by COVID), the growing need
for operational efficiency given tightening economic conditions, and the rising
importance of compliance and risk management.
Digital transformation
An Icertis survey found that 67% of 500 executives at Global 2000 companies felt
like their digital transformations were not helping them get ahead of their
competition.
But as more and more companies do invest in their digital transformations,
they're turning towards software to improve their operations, and contract
management is a critical area that benefits from digitization, driving increased
demand for CLM software.
By automating their contract management through CLM software, companies
can grow their contract velocity by 80%—63% of companies that use CLM say
their negotiations are more profitable and proceed faster.
Operational efficiency
Contract management, being a labor-intensive process when done manually,
represents an area ripe for improvement when it comes to operational efficiency.
Across large companies, a McKinsey report pegged the cost ofleakage” due to
unmet obligations embedded in contracts at 2%—the equivalent of $20M per year
for a company spending $1B per year.
Thats added to the 5-40% of contract value that companies can end up throwing
away every year by not incorporating features like rebates, volume discounts and
price adjustments into their contracts.
Compliance costs
Regulatory environments are becoming more complex, and businesses face
higher risks related to non-compliance with contracts. CLM software helps
manage these risks and ensure compliance by providing visibility and control
over contracts.
Without CLM software, humans are required to stay on top of all the clauses in a
contract, and missing one can expose companies to severe reputational and
financial losses. One public company that Icertis worked with faced a customer
lawsuit due to an oversight like this—and the company was forced to pay out
millions of dollars to remedy the situation.